Get to Know Your CFO

Establishing relationships with leaders in your health system can be beneficial for both your department and your patients.

For those of us who work within a hospital system, its corporate leadership can seem very far away from our daily lives. The so-called C-suite (home to the CEO, CFO, CMO, and COO, depending on the local vernacular) often seems to exist on a different planet than the reading room.

Despite this perceived distance, it is increasingly important that the leaders of our health systems understand what we do and become familiar with the payment policy that impacts the reimbursement for our services.

My colleague James V. Rawson, MD, FACR, who chairs the ACR’s Hospital Outpatient Prospective Payment System (HOPPS) committee, has for the last few years contributed to an excellent annual article on the changes in HOPPS coding radiologists need to be aware of in order to ensure their hospital is capturing data correctly. It’s a complex topic, however, and we continually face new challenges. (Read the 2014 article at http://bit.ly/2014HOPPS. Learn more about the future direction of HOPPS in the Imaging 3.0™ toolkit at http://bit.ly/Img3HOPPS.)

We’ll soon be receiving the proposed Medicare rules for 2015. In last year’s HOPPS proposed rule, CMS implemented a long-threatened requirement for separate cost center reporting for CT and MRI. What did this mean? HOPPS technical charges are paid based on the average cost of providing the service reported by hospitals. Because many hospitals do not have experience with breaking out the costs of providing CT and MRI, the new proposed requirement resulted in savage cuts of up to 27 percent to the HOPPS technical component payments. A knock-on effect resulted from the provisions of the Deficit Reduction Act (DRA), which, in 1996, effectively linked technical component payments in independent radiology practice to those in HOPPS and paid the lower of the two rates. The drastic HOPPS reductions meant that several previously unaffected CT and MRI codes were now impacted by the DRA provisions.

As the ACR tried to rouse support for a pushback, we found the societies that represent hospital leadership were less concerned than we were. We wondered if, to them, these cuts did not seem to be a large enough problem in the context of the broader hospital payment economy, even though money would almost certainly be left on the table as a result of the changes. While these cuts might not directly impact a radiology department or group measured and rewarded only for professional-component work, if the hospital feels that it is losing revenue on the technical component, this might have a negative downstream effect on decisions about investment in imaging technology or even the group’s contract.

The final HOPPS rule mitigated the impact somewhat by pushing off until 2018 the inclusion of data from hospitals not currently reporting separately, but the real improvement was slight.

In thinking how to learn from this unfortunate experience, we realized that we must connect more effectively with hospital leadership, specifically the CFOs. We’ve been working closely with our friends and colleagues at the Association of Hospital Radiology Administrators, and we decided that 2014 would see us change our tactics. So far, we have made contact with the Hospital Financial Management Association and are writing an article for their journal. We’re also planning to attend their annual meeting. This will obviously be a marathon and not a sprint, but opening the conversation is a good start.

Radiologists also need to have an ongoing conversation about price transparency with our colleagues in hospital financial management. Steven Brill’s Time article attacking opaque and confusing health care pricing has shone a light on this issue. I talked in my April column about our responsibility to help our patients navigate this issue (visit http://bit.ly/AprilEcon). As I said in that piece, hospitals have obligations to provide 24/7 service, to care for the uninsured, and to train the doctors of the future. And, as they point out, most patients do not pay the “list price” in the chargemaster.

We need to be informed if we are to uphold our obligations to our patients. As Jim Rawson says, review your chargemaster annually. Make sure you know the prices your patients are paying so that you can help them understand the value of the services we provide as radiologists. Doing so will also make you a more informed advocate for the investment that your health system may need to make to continue to provide high-quality imaging care. In a large health system, yours will not be the only voice asking for investment. Make sure it’s the best prepared!

As always, I’d love to hear your feedback at This email address is being protected from spambots. You need JavaScript enabled to view it. and encourage you to follow me on Twitter at @DrGMcGinty.